This project brings together researchers from the United States and South Africa to analyze the effect of family background and community characteristics on the outcomes of young people in South Africa. The dramatic social and political changes in South Africa have greatly changed the opportunities and incentives facing young people. The apartheid system imposed many restrictions on non-white South Africans, including what schools they could attend, where they could live, and what jobs they could hold. The response of families and individuals to relaxation of these restrictions, and the effects of these responses on a wide range of outcomes, tell us a great deal about the role of family, community, and labor market characteristics on youth outcomes. Although opportunities have expanded, young South Africans still enter a labor market characterized by high unemployment and extreme inequality. This project will use a number of existing data sets, including censuses, household surveys, and school surveys, to analyze the determinants of schooling, employment, earnings, migration, marriage, and fertility for young South Africans. The project will also collect a new longitudinal survey of about 2500 households in the Western Cape Province, including 2600 12-24 year-olds. The young people will be interviewed in two rounds over a three-year period, making it possible to study the determinants of progress in school, transitions from school to work, job search, migration, marriage, and fertility outcomes. The project will look at the effects of family background on schooling, testing the hypothesis that increased school choice for black families has allowed better educated parents to choose higher quality schools, causing an increase in the schooling advantage of children with better educated parents. The project will use spatial variation in local labor markets to test whether South Africa?s high unemployment rates increase school enrollment by lowering opportunity costs, or reduce enrollment by signaling poor economic opportunities. The project will analyze the levels and causes of grade repetition, a major determinant of low schooling attainment for South African blacks. The new longitudinal survey will greatly increase our understanding of grade repetition, including the role of family characteristics, school quality, and labor market conditions. The project will also analyze the effect of economic shocks and family disruption on the outcomes of young people such as school enrollment grade advancement and employment.